Vedanta Resources boosts metal production; 1Q revenues up 42 %

Vedanta said Thursday that for the quarter ended Jun. 30, 2007, revenues and EBITDA were $1,850.3 million and $695.4 million respectively, including Sesa Goa, compared to $1.3 billion and $589.0 million respectively. The company said that the increase was primarily on account of higher volumes and better price realisations. Production across all metals in India was significantly higher than the corresponding prior quarter mainly because of contribution from the newly commissioned projects For the quarter, aluminium production was 97,000 tonnes, higher than the rated capacity and consistent with the production trends of the last two quarters. The new Korba smelter produced over 62,000 tonnes of hot metal during the quarter and has consistently performed at these levels for three consecutive quarters. Q1 aluminium revenues and EBITDA were $281.8 million and $110.2 million. Sales volumes were largely in line with production volume during the quarter and the costs too were largely stable. The increase in revenues and EBITDA, as compared to the corresponding prior quarter, was primarily on account of higher volumes from the new Korba smelter and better LME prices partially offset by appreciation of the Indian Rupee against the U.S. dollar. Its operating costs have been stable. Global alumina prices have seen an upward trend in the first quarter of the current fiscal which has impacted its costs. BALCO was recently awarded the coveted President of India's Nirmal Gram Award for its sanitation project in Korba by the Ministry of Rural Development, Government of India. Copper cathode production at its Tuticorin plant in the quarter at 81,000 tonnes is comparable with the preceding quarter except for the effect of the planned maintenance shutdown in April 2007. Q1 copper revenues were $748.1 million as compared with $472.7 million in the corresponding prior quarter, primarily due to higher volumes and higher metal prices. For the same period, EBITDA was $71.6 million compared with $115.2 million in the corresponding prior quarter, a decrease of 38% primarily due to lower TCRC realisation and lower despatches from its captive mines. EBITDA for the quarter is higher than the preceding quarter despite lower TC/RC, mainly due to better performance of its phosphoric acid business and better by-product management. Its costs are showing an improving trend. In line with the current market trend, it expects TCRC to further soften and the full year TCRC is expected to be half the level of last fiscal year. Sterlite was recently awarded the 'Excellent Energy Efficient Unit' award by the Confederation of Indian Industry. During the current quarter, KCM produced 39,000 tonnes of copper cathode, marginally higher than the preceding quarter and at the same level as the corresponding prior quarter. This has been achieved despite low equipment availability consequent to planned partial plant shutdown for major overhauling of Nkana smelter in April 2007. Cathode production from the smelter was around 23,000 tonnes. The production from the tailings leach plant improved significantly and was at 16,000 tonnes for the quarter. Q1 Zambia copper revenues were $274.7 million as compared with $253.1 million in the corresponding prior quarter primarily due to higher volumes. Q1 EBITDA was $106.2 million as compared with $126.0 million in the corresponding prior quarter. The decrease was primarily due to higher cost of production in the current quarter and lower price realisation as compared to corresponding prior quarter. The unit cost has shown a marginal reduction this quarter as compared to preceding quarter primarily on account of increased production. The zinc mined metal production at 134,000 tonnes during the quarter is the highest ever production in a quarter. During the same period refined zinc production was 93,000 tonnes. Sales during the current quarter were augmented by sales of about 50,000 dry metric tonnes of zinc concentrate and about 5,000 dry metric tonnes of lead concentrate. Q1 zinc revenues were $476.3 million as compared with $353.6 million in the corresponding prior quarter and EBITDA was at $385.8 million over $279.4 million in corresponding prior quarter, an increase of 38%, both due to increase in volumes and better LME partially offset by appreciation of Indian Rupee against U.S. dollar. Operating costs have been largely stable except for some increase in power costs. The Alumina refinery at Lanjigarh is designed to produce 1.4 million TPA of calcined alumina, through two streams, each producing 0.7 million tonnes, and captive power plant. Presently, the first stream of alumina refinery is commissioned with outsourced bauxite. Alumina is scheduled for dispatch during last week of July 2007. As regards the environmental clearances for developing the Lanjigarh bauxite deposits, the matter is scheduled for hearing by the Supreme Court during August 2007 and it is hopeful of a positive resolution in the matter. Work on the first phase of the green-field 500,000 tpa aluminium smelter and associated 1,215 MW captive power plant in Jharsuguda, Orissa, is progressing well. Civil construction of the pot rooms and other associated plants is progressing well. Over 100 pots have already been installed. Equipment deliveries are also on track. Overall project is on schedule and on budget for commissioning of the first phase of 250,000 tpa and associated captive power plant for second half of CY 2009 and the second phase by end of CY 2010. Work on the 2,400 MW (4X600 MW) coal based Independent thermal power plant has commenced. An EPC contract has been released and the work is in full swing. Overall the project is on schedule for progressive commissioning from late 2009 as announced. Work on the KDMP expansion project to increase the copper ore output from Konkola mine to 6 million tpa is progressing well. All the major areas such as new shaft, ventilation shaft, pipe shaft and concentrator are on track with main shaft having already reached a depth of 90 meters. Further work at the Nchanga smelter expansion project, which will add copper capacity of 250,000 tpa is progressing well. The foundation of the flash furnace, ESP and the sulphuric acid plant are complete and equipment deliveries have commenced. All orders have been placed for the Phase II 170,000 tpa Chanderiya expansion project and construction activity at the site is in full swing. The roaster plant, which is the first stage of the smelting process, has been completed and put under operation. The leaching and purification plant and the cell house plant are also on track. Similarly work on the captive power plant and at the Agucha concentrator, to raise the milling capacity to 5.0 million tpa, is progressing well. The progress on the overall project is good and as advised earlier, Chanderiya smelter is expected to be ready by December 2007, about 3 months ahead of its earlier schedule of early 2008. In pursuit of the company's vision to generate 10% of its energy requirement through green energy, it has placed a turnkey contract for 148.8MW of which the first of 38.4 MW has been successfully commissioned ahead of schedule during March 2007 while the work on the balance is on as per schedule for progressive commissioning by March 2008.